April 11, 2024
After nearly 20 years of visiting software development companies in Latin America, I’m more convinced than ever of the merits of outsourcing software developments to nearshore locations like Costa Rica, Colombia, Brazil, and Chile.
It’s worth briefly recapping what I believe are the five key factors that make the region so attractive to North American businesses considering outsourcing their software development:
What Makes Latin America Such a Great Outsourcing Destination?
Time zone alignment
The big advantage of nearshoring to Latin America is the overlapping or close time zones, which facilitate real-time communication and collaboration. This alignment allows for more agile development processes and quicker decision-making, as teams can work simultaneously and address issues promptly.
The simple act of arranging a Zoom meeting is so much easier when you are working in a similar time zone to your nearshore team.
Geographical proximity
The physical closeness of Latin American countries to the U.S. makes travel for in-person meetings more feasible and cost-effective. You can leverage this advantage for key project milestones, fostering stronger relationships and ensuring alignment on project goals.
Cultural affinity and work ethic
Latin American countries share common values and business practices with their North American counterparts, which can streamline interactions and foster collaboration. Understanding and respecting these cultural nuances is vital and we encourage our customers to get on a plane and visit their outsourcing partner to build a strong and respectful collaboration between your in-house developers and your nearshore team.
A highly capable workforce
Latin American nations have long had a strong focus on education, and in the last 20 years, they have shrewdly focused attention in particular on the STEM (science, technology, engineering, mathematics) subjects. This means that the region has a young and highly capable developer workforce. Not only that but experienced project managers and company leaders have fostered an excellent business culture in IT services. Many of these people have also studied or spent time working in the US, so understand the North American style of doing business and collaborating.
Language proficiency and communication
Clear communication is the cornerstone of any successful outsourcing partnership. While English proficiency is generally high among Latin American IT professionals, ensuring language compatibility is crucial. You should assess the language skills of potential nearshore teams and consider appointing bilingual project managers to facilitate communication and bridge any language gaps.
You can access in-depth economic, political and developer rates analysis for 13 outsourcing destinations in Latin America in our Latin American Region Guide to Software. Download your copy now!
Don’t Take These Things for Granted
Yes, Latin America has so much going for it as an outsourcing destination. But even with the ideal conditions for success, outsourcing projects can and do go awry. In any software project, there are four elements you need to get right - technology, process, people, and information. The most crucial by far is the people element. You can fix broken technology, introduce better processes, and assemble more relevant information.
But if you don’t have the right people in place, and make sure the bonds between them are strong, particularly in an outsourcing arrangement, you set yourself on the pathway to failure.
In Latin America there’s a saying:
La amistad no pide nada a cambio, excepto un poco de mantenimiento
Friendship asks for nothing in return, except a little maintenance
You may be paying the development bills, but a true partnership requires you to invest in building a strong relationship with your outsourcing partner, one that takes account of their needs, their way of working, and their approach to achieving outsourcing success.
It can’t be a purely transactional relationship. To be successful and productive for both parties, it requires ongoing maintenance. This is why Accelerance spends so much time in the region, bringing customers with us to meet and establish relationships with outsourcing partners. It involves face-to-face visits, team-building activities, highly effective documentation written and online communication, and a commitment to giving each other frank feedback regularly.
We’ve spent decades working productively in Latin America with great outsourcing partners. We place clear communication front and center in our relationships with partners, wherever they are located in the world.
But when it comes to the nearshore destination of Latin America, here are ten aspects we urge you to pay attention to when seeking to establish and develop your relationship with your outsourcing partner:
| Prioritize personal connections: In Latin America, business is often conducted based on personal relationships. Taking the time to build rapport and trust with counterparts is essential. | Social interaction: Engage in social activities and show genuine interest in your counterparts as individuals, not just business partners. These are culturally rich nations. Show that you are interested in their part of the world, and their unique culture. | Cultural sensitivity: Respect cultural differences. Recognize that each Latin American country has its own identity and way of conducting business. |
| Understand negotiation styles: Be aware that negotiation in Latin America may involve more haggling and a preference for long-term relationships over quick deals. Americans are very explicit. Whereas Latin cultures are more implicit. So the customer has to learn to be a little bit more subtle and the nearshore team and management may need to learn to be more explicit. Otherwise, there will be misunderstandings. | Adapt to formality levels: Adjust your communication style according to the local culture, which may be more formal or informal than what you're used to. | Be mindful of indirect communication: Latin American communication can be more indirect compared to the directness often found in other cultures. |
| Flexibility with time: Understand that punctuality may be more relaxed in Latin America, and meetings may not always start or end on time. | Language proficiency: While not always necessary, speaking the local language or at least knowing key phrases can be very beneficial. | Non-verbal communication: Pay attention to body language, gestures, and other non-verbal cues that are significant in Latin American cultures. |
Educate yourself: Continuously learn about the culture and business environment of the specific Latin American country you are dealing with. Contact us to guide you in the process.
